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High Income Child Benefit charge
04/05/2016

The High Income Child Benefit Charge (HICBC) applies to taxpayers whose income exceeds £50,000 in a tax year and who are in receipt of child benefit. The charge either reduces or removes the financial benefit of receiving child benefit. Where both partners have an income that exceeds £50,000, the charge applies only to the partner with the highest income.

The child benefit charge is charged at the rate of 1% of the full child benefit award for each £100 of income between £50,000 and £60,000. For taxpayers with income above £60,000, the amount of the charge will equal the amount of child benefit received.

Since the charge was introduced, taxpayers affected have had the choice of whether to keep receiving child benefit and pay the tax charge through self assessment, or may elect to stop receiving child benefit and not pay the new charge. Taxpayers who continue to receive child benefit (and earn over the relevant limits) must pay any tax owed for 2015-16 on or before 31 January 2017.

There is a form to notify HMRC to stop your child benefit payments if you or your partner earn over the relevant limits and do not wish to pay the HICBC. There is also a form (CH995) that can be used to allow a tax adviser or accountant to act on your behalf for the HICBC. An online version of this form has been added and can be completed online, alternatively a postal form is also available.


 

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